Northrop Grumman Corp raised its full-year sales and earnings outlook as the United States weapon maker’s quarterly result topped estimates on Thursday, helped by higher demand for its nuclear program and missile-warning radars.
US President Joe Biden has proposed a flat defense budget for 2022, despite calls from progressive Democrats to cut Pentagon spending, removing a potential obstacle to profits at defense companies, including Northrop.
Northrop said it now expects full-year adjusted earnings per share between $24 and $24.50, up from its prior range of $23.15 to $23.65, and above analysts’ average estimate of $23.65, according to IBES data from Refinitiv.
The company raised its 2021 sales outlook to between $35.3 billion and $35.7 billion from $35.1 billion to $35.5 billion. Sales in Northrop’s space systems business jumped 29% to $2.52 billion and operating income surged 37% to $276 million, aided by the production ramp-up of its GBSD intercontinental ballistic missiles and higher demand for Next-Gen OPIR missile-warning radars.
Sales in Northrop’s aeronautics systems unit, which makes the center fuselage for the F-35 jets, rose 5% to $2.99 billion while operating income increased 17% to $308 million in the first quarter ended March 31.